Addressed to the Prime Minister, Mr. Curtin.

I have now had an opportunity of fully discussing the points
raised in your telegram [1]70 [1] of the 9th November with
Alexander [2] and responsible officers in the Admiralty. In these
discussions I emphasised facts that our manpower problem is even
more acute than that existing here and that the facts with regard
to it have been brought clearly to their notice, both in your
telegrams and by your statements and the information you supplied
when you were here. I pointed out that in pursuance of your
promise to render all the aid in your power you had set up a
special committee of the War Cabinet to consider how far we could
help, but that their task had been rendered impossible by a steady
flow of supplementary requirements after the Cabinet Committee had
commenced consideration of their original substantial requests. I
said that in the demands they were making they appeared to be
ignoring the facts of the manpower position in Australia and
almost appeared to be trying to shift some of their own manpower
embarrassments on to Australia's already overburdened shoulders.

All this Alexander took quite well. He repudiated any idea of
trying to unload their troubles on to us, said that the Admiralty
fully realised Australia's manpower difficulties and stated that
the sole object of their telegrams [3] had been to discover what
men Australia could provide so that the best solution could be
reached of the manpower problems involved in implementing the
Octagon [4] decisions.

Following our discussions with the Admiralty, Alexander has now
sent me a note setting out the Admiralty's position. The following
is a summary.

Begins:

The Admiralty state they are faced with serious difficulties in
finding men for shore services in Australia in view of the
manpower situation in the United Kingdom which is also stretched
to the limit, and which has been further aggravated by the
prolongation of the war in Europe. In fact, the Navy have recently
had to transfer men to the Army for maintenance of strength on the
Continent.

Apart from the known desire of the Commonwealth Government to help
if they could, the Admiralty were also influenced by the
consideration that the maximum Australian assistance would:-

(a) Alleviate the persistent shortage of shipping.

(b) Reduce the loss of man hours which is bound to occur while men
are awaiting passage and are on passage from this country.

You will be aware that an undertaking has been given to the
Americans that the British Pacific Fleet will be self-supporting.

Manpower requirements arising from this fall broadly into two
categories:-

(a) Ship repair and supply service labour.

(b) Works labour.

As regards the first, the Admiralty are working on plans to
produce a limited number of repair ratings by accepting reductions
in base facilities elsewhere. In many of the categories of
specialised. rating who alone possess qualifications for these
duties the Navy already faces a deficit and if more men are to be
earmarked to man up facilities in Australia, the strength of the
seagoing fleet might well have to be further reduced. Some ships
have already been paid off to save men and the Admiralty are most
anxious for obvious reasons to avoid carrying the process further.

You will be aware that they have very much in mind the imminent
prospect of a new U-boat offensive.

The Admiralty have the further problem of ensuring minimum
requisite base facilities for future operations in the Indian
Ocean area to which they are committed. This particular problem is
specially acute as regards works labour, and it is already
difficult to see how minimum requisite works facilities can be
completed in time. The possibility of further inroads on the
civilian building labour force in this country is precluded by the
very grave housing situation due to the destruction and damage
caused by enemy attacks, particularly be flying bombs in London
since June.

To sum up, the Admiralty are fully alive to and sympathise with
the Australian difficulties and the object of their various
requests and enquiries is to ascertain how far Australia can help.

Within their existing resources, the contribution which the
Admiralty themselves can make is limited and in view of the
general manpower stringency in the United Kingdom, they must be
able to state clearly, and to substantiate fully to the United
Kingdom War Cabinet what further manpower bids they may have to
make on United Kingdom manpower in order to meet any deficit
remaining after taking account of Australian contribution,
P.O.W.[s] and the limited number of men who can be skimmed off
from existing Admiralty resources. In view of the urgency of the
problem, the Admiralty felt it best to put their cards on the
table and state the full estimated requirements at the outset.

The Admiralty add that it would greatly assist them if the report
referred to in paragraph 2 of your telegram No. 298 [5] to the
Dominions Office could be expedited.

BRUCE